The Dallas Fed Is Calling For The Immediate Breakup Of Large Banks

Richard FisherIt's hard not to think it's a big deal when a branch of the Federal Reserve system calls for the breakup of major American banks.

The bank has just released its annual report, and the title of the letter is: Choosing the Road to Prosperity Why We Must End Too Big to Fail—Now.

Here's the full letter from Dallas Fed President Richard Fisher, generally known as one of the most hawkish and conservative Fed Presidents.

Letter from the
President
If you are running one of the “too-big- to-fail” (TBTF) banks—alternatively known as “systemically important financial institutions,” or SIFIs—I doubt you are going to like what you read in this annual report essay written by Harvey Rosenblum, the head of the Dallas Fed’s Research Department, a highly regarded Federal Reserve veteran of 40 years and the former president of the National Association for Business Economics.

18. You probably have a Comerica-issued The Direct Express® Debit MasterCard® ?

In which case Comerica has opened an account for the debit card that is essentially like a checking account without checks. Plus, the debit card may have restrictions on use and doesn't allow overdrafts, etc. that a normal checking account debit card might allow.

Monthly SSA provides an instruction to the US Treasury which sends it to the Fed of NY to transfer an amount of money equal to your benefits to your account at Comerica. As you use the debit card, the funds in the account are drawn down.

4. shhh! The Masters of the Universe don't want to talk about TBTF (nt)

37. That's because it works out as "Too Big To JAIL"

When they do get convicted in court, the penalty is usually a fine that merely equals a tax on ill-gotten-gains.
Just think if three-strikes-you're-out laws applied to big banks and corporations: their size and longevity would guarantee that sooner or later they couldn't afford another conviction, and thence well behaved!
It would make breaking up very attractive, or it would get three-strikes laws thrown out; either way, good.

16. all the states should get this memo

I used a local bank in CT for 20 yrs., which was recently taken over by "Union Savings Bank." Found out this is a subsidiary of Bank of America and now they're charging fees for no activity if you don't write a check or whatever in a month.

35. Time to find another bank!

17. OWS should be all over this

This is something OWS could latch onto with some sort of "break 'em up ourselves" movement. Encourage cities and individuals, as well as local businesses to "go local" with their banking to "break up the TBTF ourselves".

29. Okay

I drive 13 miles to work every day, but that's neither here nor there. If the credit union has "online banking" it can remove many of the reasons for ever going to the bank. I go once a month and I really don't "have" to do that, ATM's will handle 90% of it.

'Tis a sad statement though that the only institutions are TBTF. Strange economics.

30. It is an unreasonable walking distance. Local = reasonable walking distance.

Poor people likely don't have cars, or if they do, cannot afford to drive them. Presuming a mile can be walked in about 20 minutes, that's 3 mph. 13/3 ≈ 4+ hours. Walking to and back from your bank should take 8-9 hours of ones day?

My definition of local is within walking distance.

We do drive 13 miles, 26 miles round trip, once per month. Hopefully, we can get everything we need on that schedule, with the exceptions of fresh fruits and vegetables. There really isn't money for a new car, proper repair of the old car (love to get it painted, but not necessary to its function), or even the cost of gasoline.

If one needs to have a bank, it should be within a reasonable walking distance. I'm guessing that's very roughly a 1 mile radius, consuming less than 1 hour roundtrip for foot transport.

It is doubtful that future generations, the mass of people, will have much other than their feet to transport them from place to place.

23. It is not leading because it is not bleeding red......

31. Why stop at The Banks?

We desperately need another Teddy Roosevelt ("The Trust Buster") to break up ALL the Too BIG Corporate entities,
and return to a system where Mom & Pop (Locally owned businesses) could compete with the Big Boxes on a level playing field.

When I was young (50s & 60s), an out-of-state corporation could NOT come into an area and undercut the local businesses.
At that time, small, locally owned businesses thrived in Small Town America,
and a dollar spent at those businesses circulated in the local economy.

Now, the only locally owned businesses surviving in small towns are Antique Dealers (Junk Stores), Beauty Parlors, and Funeral Homes.

You will know them by their WORKS,
not by their excuses.
Solidarity99!--------------------------------------------------------------------------------------------------------------------------------

40. I Bank at a local

bank, the Bank of Richmondville. It has three branches and only here in Schoharie county. (Upstate NY). It is totally locally owned and does not farm out its mortgages. I have had an account for over 30 years and now that I'm retired my SSA is automatically deposited with them and since I'm over 60, I get free checking. I do a lot of my credit account payments by phone for free. The President of the Bank sits in front of me at church and the VP (retired, a woman) sits two pews in front of me. The current VP is another woman. A Progressive bank with roots in the local community. The second owner is in Ripley's as being the longest serving President of a bank (75 years) and he paid off all of our village's debts about 30 years ago. Donated a fire truck to the VFD and a swimming pool for the kids. That's because of purchasing IBM stock many years ago when it was only 25 cents a share.